Development deals, clinical advances, startup funding, and new hires made up the New England life sciences news this week.

—Chelsea, MA-based Civitas Therapeutics, a spinout from the Waltham, MA, biotech Alkermes (NASDAQ: ALKS), said that its inhaled form of the Parkinson’s disease drug L-dopa performed well in a Phase 1 clinical trial. The study aimed to test the drug’s safety and whether the drug’s delivery to the lungs gets it into the bloodstream in levels that produce a therapeutic outcome.

—Serial biotech entrepreneurs Bob Langer (of MIT) and Omid Farokhzad (of Harvard Medical School) have founded their newest company, Blend Therapeutics, alongside MIT professor Stephen Lippard. Blend is reportedly backed by Flagship Ventures, New Enterprise Associates, and NanoDimension.

—Cambridge-based genomics analysis startup Knome named former NormOxys CEO Martin Tolar its new chief executive and landed a new contract from Johns Hopkins University.

—Watertown, MA-based Forma Therapeutics announced a cancer drug discovery partnership with Johnson & Johnson’s (NYSE: JNJ) Janssen Biotech, worth up to $700 million over time. That’s less than a week after Forma’s $65 million partnership with Boehringer Ingelheim was announced.

—Warp Drive Bio came out of the woodwork this week with $125 million in funding, and hopes to examine the genetic makeup of plants, animals, and other organisms to find hot new drugs. Cambridge-based Warp is backed by Boston firm Third Rock Ventures, Greylock Partners, and French pharmaceutical giant Sanofi, and has an elite roster of founders, including Harvard genomics expert George Church.

—Cambridge-based Flagship Ventures surpassed its initial $250 million expectation for its fourth fund, announcing the fund closed at $270 million. It will focus on investments in the life sciences and cleantech sectors.

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Like a lot of biotech executives focused on developing drugs, Martin Tolar has long been skeptical of the value of genomics in bringing about personalized medicine. But over the past few months of scoping out new opportunities, he’s become enough of a believer to jump into genomics with both feet, as the new CEO of Cambridge, MA-based Knome.

“You always hear about genomics and the revolution that never happened,” Tolar says. “There was Millennium and deCode, and others who raised lots of money. But I looked at this and said, ‘No, this is incredible, it’s really happening.’ All the pieces of equation are coming together.’”

Tolar, the former CEO of Wellesley, MA-based NormOxys, is joining Knome just as it has completed its fourth year in business, which was by far its best. The company is announcing today that it has won a new contract to analyze and compare 1,000 genomes for scientists at Johns Hopkins University, who are looking for genetic variants linked to asthma in African American and African Caribbean populations. It’s the latest addition to Knome’s roster of about 100 customers for its genomic-analysis software service, although the Hopkins project is by far the biggest. Knome isn’t disclosing the value of the new project, but the company expects to generate $20 million in revenue in 2012 from academic, biotech, and pharmaceutical industry customers, Tolar says.

Tolar joins Knome after his previous company—which raised $17.5 million in May 2010—discovered in clinical trials that its experimental drug worked in a different way than its scientists thought. The NormOxys drug was shown to alter the PI3 kinase pathway, instead of releasing controlled amounts of oxygen into cells. Tolar didn’t say much about the situation, other than that the NormOxys drug is still moving forward in clinical trials for a different use, and that he was more excited by the task in front of him at Knome.

Martin Tolar

Knome’s previous CEO, Jorge Conde, is staying with the company as chief strategy officer, and will focus on product development, Tolar says. The management team is being further filled out by Jonas Lee, a board member who will now join the company as chief marketing officer, while Marc Rubenfeld, formerly of Beckman Coulter, is joining as vice president of operations.

The timing is right for Knome to grow in 2012, Tolar says, because the torrid pace of innovation with faster/cheaper DNA sequencing hardware has created … Next Page »

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As you may or may not know, it’s not just Xconomy’s staff editors who are powering our website with thoughtful reflections on the happenings in each of our city’s high-tech and innovation communities. We have more or less a dream team of innovators in each city who write for our Xconomist Forum, submitting posts on subjects plaguing their fields or assembling around a big news event (for example, the death of a tech icon like Steve Jobs). Once a year in each city, we get together to celebrate that group of inventors, entrepreneurs, (seed, angel, and venture) investors, academics, lawyers, and more.

This year’s Boston-area Xconomist reception, sponsored by Goodwin Procter and BDO (thank you!), was held at the hot new Kendall Square restaurant Catalyst, a great venue for our high-caliber guest list. Among the attendees? Mathematica inventor Stephen Wolfram, Nobel laureate Phillip Sharp, Harvard geneticist George Church, retired Vertex Pharmaceuticals CEO Josh Boger, venture capitalist Rich Levandov, and iRobot founders Rod Brooks and Helen Greiner. I could tell you more, but that’d be ruining the fun of flipping through these snapshots.

	NEXT IMAGE >>
	Young guns – Left to right: Rob Go from NextView Ventures; Phil Beauregard and Matt Grace from Objective Logistics.
	photo by Keith Spiro of Kendall Press

… Next Page »

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There just aren’t that many rich people who want to do scientifically adventurous things like fly in outer space or get their entire genomes sequenced. Fortunately for Cambridge, MA-based Knome, it has found a way to keep its genomic analysis business alive by doing something more than appealing to the curiosity, or vanity, of the mega-rich.

Knome, co-founded in 2007 by Harvard genomics ace George Church, made headlines in its early days when it said it sequenced and analyzed the genomes of three wealthy people for the cool sum of $350,000 each. A year later, the price dropped to $100,000, which meant that a few more folks with genetic diseases in their families were able to afford what it took to scrutinize their genomes. But only now that commercially available sequencers can blaze through an entire 6-billion letter human genome for less than $5,000, Knome has been able to branch out its business to appeal to a whole lot more people.

Molecular biologists and biochemists, for starters, are increasingly becoming curious about using the new tools of genomics for their experiments. But they typically don’t have the math and statistics background to make much sense of the data. People who are trained in bioinformatics who can help analyze and visualize these massive piles of raw data, as you might imagine, are in short supply and high demand these days. As academics start dreaming up all kinds of questions they can realistically ask through sequencing genomes for $5,000 a person, and Big Pharma companies even start to mull whether to sequence patients in their clinical drug trials, it’s created a broader base of interest in the kind of more automated genomic analysis and interpretation that Knome was built to provide.

“We are really working on two fronts now,” says Jorge Conde, Knome’s CEO and co-founder. “We’re trying to make bioinformaticians more efficient, to make it so they can do more with the data. And we are aiming to make the data more accessible to a non-bioinformatician.”

This, of course, is easier said than done. When you start talking to a biologist, or a physician for that matter, about various ways of looking at genomes, transcriptomes, exomes, and the increased or decreased probabilities of disease that might (or might not) stem from those results, eyes glaze quickly. “It’s a foreign language,” Conde says.

Knome is a private company, and doesn’t say much about its finances, but it is showing signs of gaining traction in its fourth year of operations. The company has built up a team of 30 employees in Cambridge, plus another 10 in India. It has recently come out with a version 2.0 of its software. Researchers from Harvard Medical School, the Mayo Clinic, the University of British Columbia, the University of Seoul, have started using the service, among others, Conde says.

Jorge Conde

Knome, financed by the founders in the beginning, has now pulled in a total of $12 million in investment capital from the founders, angels, France-based bioMerieux, and one more unnamed strategic investor. The latest strategic investment, worth $5 million, arrived in July, according to a regulatory filing. Knome now plans to “hire aggressively,” Conde says, and currently lists seven openings on its company site.

Conde wouldn’t disclose actual revenues, or Knome’s growth projections, but he did say in the first quarter of 2011, the company generated more revenue than it had in its cumulative history to that point.

The founding idea in 2007, Conde says, “was to make genomics accessible to the public.” But the cost of the sequencing in the first three years was still so high, there was no way it could be truly accessible, and only a select few genomics experts and bioinformaticians were able to use the Knome service. But now that Illumina, Life Technologies and Complete Genomics have all developed commercial sequencing technologies that can go for less than $5,000 a genome, Knome has found more interest in its software (called kGAP 2.0) that can compare new genomes sequenced on the various instruments vs. what is known in the scientific literature about relationships between DNA and disease.

Now that cost is really less of a barrier, there’s another one standing in the way of making genomics accessible—lack of expertise. Researchers in Big Pharma companies, and academic … Next Page »

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Sam Isaly, the founder and managing partner of OrbiMed Advisors in New York, will bring a breadth of investing experience and range of perspectives to Xconomy’s first New York event—Life Sciences 2031, a panel discussion on October 13. OrbiMed operates healthcare hedge funds, private equity funds, and mutual funds, including the Eaton Vance Worldwide Health Sciences Fund, which Isaly manages. In August, OrbiMed closed a new $600 million fund called Royal Opportunities, which will acquire healthcare royalty streams and provide structured debt capital to companies in the industry.

Isaly thinks of his approach to investing as “the endless pursuit of the new,” he says. He loves to describe his experience having his own genome sequenced, and likens himself as an investor who’s ahead of the curve when it comes to spotting innovations in health care.

The topic of genomics and personalized medicine is sure to be a hot one at Xconomy’s forum—and that suits Isaly just fine. “We have multiple interfaces with next-generation sequencing,” he says of OrbiMed’s investment portfolio. For example, one of the top 25 holdings in the Eaton Vance fund that Isaly manages is Illumina (NASDAQ: ILMN), a San Diego-based maker of research tools that boost the efficiency of high-speed gene sequencing, spot subtle variations in DNA, and analyze the various methods by which genes can get turned on or off. Although Illumina’s stock has faltered lately on concerns about slower-than-expected sales and profit growth, as a long-term holding, Isaly says, “Illumina has been great.”

Isaly believes advances in gene sequencing will ensure that the long-awaited promise of personalized medicine will come to fruition. As proof, he points to the new Roche drug vemurafenib (Zelboraf), which the FDA approved in August to treat … Next Page »

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Ask Jonathan Rothberg a few questions about his new venture in DNA sequencing, and, ever the showman, he find references to a pivotal event in world history while delivering what amounts to a “no comment.”

The questions were basic enough: How many employees do you have in San Francisco and Guilford, CT? How much has your R&D budget grown? How many customers have you signed up in the past nine months? Have you hit any of the milestones outlined in your 2010 merger agreement with Life Technologies?

“Come on, I’m not going to give that information out. This is like 1948 and we’re the Israelis,” Rothberg said with a laugh in a recent phone interview. “We’re still the underdog. Look at how good the other guys are. I respect my competitors too much to give out that information.”

Rothberg and his colleagues at Ion Torrent, the new unit of Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) may be tight-lipped about internal matters at the moment, but they are cutting an increasingly high profile in the world of superfast/cheap genome sequencing. The company introduced its first-of-a-kind DNA sequencing machine based on semiconductor technology in December. Demand has been strong almost right off the bat, as it rang up $13 million in sales in the most recent quarter ended June 30, a 50 percent increase over the prior three-month period. That performance has come even while Ion Torrent has been swimming upstream against government research budgets that are getting nothing but tighter.

The early sales performance is certainly a small sum to a company like Life Technologies, which had $3.6 billion in revenue last year. But there’s undoubtedly a lot more potential for the Ion Torrent machine to drive growth at Life Tech and in the biomedical research world. The earliest version of the machine costs about $49,000, fits on a lab desktop, and reads individual units of DNA in a new way, through semiconductor chips that pick up distinct electron charges from each chemical base of DNA. It’s the first commercial machine of its kind, in an industry where large and heavy sequencing instruments often cost $500,000 or more, and generate their genomes by using fluorescent tags and sophisticated cameras to read the DNA code that varies from species to species and person to person.

San Diego-based Illumina (NASDAQ:ILMN), Menlo Park, CA-based Pacific Biosciences (NASDAQ: PACB) and Mountain View, CA-based Complete Genomics (NASDAQ: GNOM) are a few of the companies deeply invested in fundamentally different kinds of technology for reading DNA at breakneck speed and low cost. Ion Torrent’s Rothberg previously founded another sequencing company, 454 Life Sciences, that was sold to Roche in 2007. There’s no doubting that Rothberg has set some lofty goals for his operation, particularly since he sold Ion Torrent to Life Technologies for $375 million, plus another $350 million in milestone payments, a year ago. Rothberg says the company’s technology is going to bring genome sequencing down to $1,000 per person by 2013; it’s going to continue to help public health officials identify pathogens within hours of outbreaks; it’s going to pave the way for a $100 billion new market.

Jonathan Rothberg

Yeah, Rothberg was quoted in a Forbes story last December saying this would become a $100 billion market. Nine months in to the product launch, he didn’t flinch, making the same prediction.

“It’s like the race to the South Pole 100 years ago,” Rothberg says. “The guys that win now will change healthcare forever. We’re at an amazing point in history.”

No question, a lot has happened for Ion Torrent since it rolled out its first commercial semiconductor sequencer, called the Personal Genome Machine, in December. The original microchip had 1.2 million accessible sensors, which was surpassed in a couple months by a new chip with 6.1 million sensors. The next iteration—expected to come out later this year—is designed to boost capacity to 11 million sensors. After only a few months on the market, the component cost of the mid-range chips dropped in price from $500 to $99. Rothberg isn’t saying yet how much the newest chips will cost.

While capacity is booming and price is falling, scientists are starting to think about experiments that couldn’t have been dreamed of a year or two ago. Ion Torrent isn’t saying how many machines it has sold so far, but, thanks to the global distribution of Life Tech, Ion Torrent’s machine is now established in labs in 40 countries, Rothberg says. The instrument, along with a rival instrument from PacBio, played a starring role in the German E.coli outbreak, helping researchers identify … Next Page »

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We caught some personnel updates and other news from public and private New England companies developing drugs, medical devices, and diagnostics technology.

—Woburn, MA-based Pathogenetix, the diagnostics and biodefense company formerly known as U.S. Genomics, raised $4 million of a targeted $9.5 million equity financing.

—Beacon Endoscopic, a Newton, MA-based startup that’s developed a fine needle aspiration system for endoscopic ultrasound and endoscopic bronchial ultrasound, inked a $5 million Series B financing from MVM Life Science Partners and took in new money from its existing angel investors.

—Knome, a Cambridge, MA-based company focused on providing personal genome sequencing services, reported in an SEC filing that it has raised $5 million of a funding round that could hit $20 million. The startup was founded by Harvard geneticist George Church in 2007.

—Mara Aspinall left her post as CEO of On-Q-ity, the Waltham, MA-based cancer diagnostics startup. She’s now the president of another business focused on cancer diagnostics: Ventana Medical Systems, an Arizona-based division of healthcare giant Roche. No word yet on who will succeed Aspinall as CEO of On-Q-ity. She’s still listed on the website as founder and director.

—Cambridge-based Acceleron Pharma expanded an anemia research partnership it has had with biotech Celgene (NASDAQ: CELG) since 2008. Celgene will pay $25 million upfront to Acceleron and could pay up to $217 million more in milestone payments and double-digit royalties, as part of a new joint development and commercialization deal for ACE-536, a compound that treats anemia.

—New York hedge fund MSMB Capital Management is attempting to thwart a proposed merger between Lexington, MA-based Amag Pharmaceuticals (NASDAQ: AMAG) and Allos Therapeutics (NASDAQ: ALTH), with an unsolicited bid to acquire Amag for $18 per share. The MSMB offer represents a 25 percent premium on Amag’s closing stock price the day before. Wall Street had reacted negatively when the $686 million merger with Allos was first announced.

—My colleague Greg wrote about Boston biotechie Stéphane Bancel, who up until last month was CEO of bioMérieux, the France-based microbiology and diagnostics firm. Read about Bancel’s thoughts on diagnostics and his work with BG Medicine, Knome, and ModeRNA here.

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Amid all the comings and goings and CEOs changing jobs in the past week—see Rick Reidy of Progress Software (NASDAQ: PRGS), Mara Aspinall of On-Q-ity, and others—one person flew under the radar in Boston.

He is Stéphane Bancel, and until last month he was the CEO of bioMérieux, the microbiology and diagnostics firm based in France. Don’t let the French accent (and fashion sense) fool you, though. Bancel is a Boston guy, he’s been in town since 2007, and he’s here to stay—which is a big deal for the biotech community.

Last week, for example, BG Medicine (NASDAQ: BGMD), a Waltham, MA-based diagnostics company, said it appointed Bancel executive chairman of its board of directors. Bancel also serves as chairman of Cambridge, MA-based Knome, a personal genomics startup co-founded by Harvard’s George Church, which raised some new money this week. (bioMérieux is an investor in Knome.) Bancel is also involved with Cambridge-based ModeRNA, a stealthy therapeutics startup backed by Flagship Ventures.

Bancel had been chief executive of bioMérieux since the beginning of 2007. The billion-dollar company, which has been around since 1963, specializes in molecular diagnostic systems for healthcare, food safety, and industrial applications—like detecting salmonella in food preparation areas or bacterial infections acquired in hospitals. The firm has about 1,500 workers in the U.S., including a small office in Cambridge’s Kendall Square.

“After five years I wanted to move to the startup world,” Bancel told me this week.

Beyond that, Bancel hasn’t said much specifically about his future plans. Bancel is the kind of guy who’s involved in dozens of far-flung projects, but it wouldn’t be surprising if he spent the next part of his career focused on a new startup at the intersection of diagnostics and pharmaceuticals. (He worked for drug giant Eli Lilly from 2000 to 2006.)

Last month, before he left bioMérieux, he sat down with me to talk about the future of diagnostics, and I got the sense that that’s where his heart is. Molecular diagnostics is evolving rapidly, he said, thanks to faster and cheaper genetic sequencing and analysis and new testing approaches. And it’s changing the whole business, he said.

As Bancel put it, diagnostics used to be (and to some extent still is) a “me too” business, full of commoditized offerings from many companies. It also used to require scale—a big testing platform to do lots of similar tests, employing lots of scientists and staff. But now diagnostics is moving “closer to a pharma business,” he said. What’s more, he thinks advances in diagnostics and life sciences … Next Page »

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A Cambridge, MA-based personal genomics company has raised $5 million from one investor in a round that could eventually total $20 million, according to a regulatory filing. Launched in 2007 by the famed Harvard geneticist George Church, Knome offers wealthy consumers the chance to have their entire genomes sequenced and analyzed by the company’s scientists. But as prices for such services have plummeted over the last few years, the once-profitable company has struggled to get back in the black.

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Busy day for a couple of well-known cleantech companies around Boston. One public company has signed a big deal in China, while the other, an ambitious upstart, is carefully protecting its intellectual property as it heads toward large-scale commercialization.

—A123 Systems (NASDAQ: AONE), the Waltham, MA-based maker of lithium ion batteries, said today it has won a contract with China’s Dongfang Electric, a large manufacturer of wind turbines and power equipment. A123 will provide an energy storage system for Dongfang’s manufacturing facility in Hangzhou by the end of this year. Financial terms weren’t given. If all goes well, this will be A123’s first storage system installed in China.

A report in CNET today has more context on the deal: A123’s battery bank will be attached to a 1.5-megawatt wind turbine and diesel generator to test how well the batteries can smooth out the dips in wind energy production. A123 has car battery manufacturing facilities in China, but no grid storage systems there yet, the report says.

—Joule Unlimited, the Cambridge, MA-based biofuels startup, said today it has been awarded a pair of U.S. patents that cover its method for producing ethanol at high volumes and high efficiencies. The method involves genetically engineering “photosynthetic bacteria”—microorganisms that convert sunlight and carbon dioxide into ethanol without fermenting sugars from cellulose or other types of biomass. The patents (#7,981,647 and #7,968,321), which were granted in the past month, cover various enzymatic mechanisms that Joule has engineered into cells to maximize their ethanol productivity.

Joule has received plenty of media attention since it started in 2007. The company is also applying its method to produce energy in the form of diesel fuel, which could power trucks and planes. Joule has previously been awarded patents in the area of diesel production. The overarching idea is to replace fossil fuels, but most biofuels makers have found “they can’t compete on a cost basis,” said Joule senior vice president Troy Campione, on a panel at our XSITE conference last month. Joule, of course, believes it is different.

The company has a pilot plant in Texas that has been producing ethanol and is slated to start producing diesel later this year. Joule says it has also signed a lease for land in New Mexico on which it is building a demonstration-scale plant that will begin operations next year.

While the new patents should help distance Joule from some of its competitors, they don’t necessarily get the company to commercialization any faster. George Church, the Harvard geneticist (and chairman of Joule’s technical advisory board), was quoted in the New York Times in March saying, “It’s not a totally obvious organism and they’ve changed it pretty radically, so it’s not clear they can protect everything by patents.”

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As one who’s spent a lifetime chasing the quest of a practical, sustainable bioeconomy – I have sympathy for biofuel skeptics. Let’s face it; petroleum is an incumbent that has no match in political or economic strength. But it is hard to deny the convergence of historical and technological trends that suggest a sustainable biofuel might soon be feasible. I have had the privilege of spending the last year in an effort called Sustainable Aviation Fuels Northwest and learned much from over forty stakeholders in the project. Let me offer four observations that give me some optimism about the viability of next generation biofuels.

Historical Shifts

Serious support for biofuels is very recent. The chemurgy movement (the early 20th century emphasis on biofuels and bioproducts from agriculture) never gained broad political traction. The Energy Security Act of 1980 mentioned biofuels but funding and interest fizzled quickly. It was not until the Farm Bill of 2002 there was an energy title, and serious support began. The last decade’s rapid ascent of Biofuels 1.0 (that being corn-based ethanol and soy-based diesel) was unprecedented. While hindsight suggests energy efficiency, environmental and economic impact could have been better managed, the creation of B1.0 didn’t include those requirements. The spark that ignited growth was the diversification and creation of new markets for a surplus of agricultural commodities while also reducing oil imports and boosting rural economic development. It was a supply-side push.

The biofuels industry emerging today (let’s call it B2.0) has learned from this brief history. First, it is now the consumers (not the producers) of the fuel looking for diversity – they seek a reliably sourced portfolio of biofeedstocks – not one silver bullet. Second, unlike ethanol and biodiesel, these new biofuels are distillates or ‘drop-in’ fuels meaning they can be blended and are compatible with petroleum’s infrastructure of refineries, pipelines, and storage. Third, these consumers are demanding global accepted standards for sustainability. Very pragmatic, in exchange for their backing of these new biofuels, they want assurance the supply chains are net energy positive, that carbon and other greenhouse gas emissions are significantly reduced, and they contribute to the environmental, economic, and social health of the region from which they are sourced and used.

Creating a viable B2.0 industry is also attracting talent, perhaps like never before. Biologists who pioneered the human genome like Craig Venter, George Church, even Lee Hood of the Institute for Systems Biology and David Baker of the University of Washington—all noted life science rock stars—have been attracted to the allure and challenge of a sustainable biofuel. Coupled with legacy agricultural land grants, like Washington State University where biofuels never went out of style, the sector is rapidly advancing. Over the past year, among the 10 IPOs in the clean tech space, four are involved with biofuels (Codexis, Solazyme, Amyris, Gevo) and one more is expected, Qteros. A few of these are converting alcohol fuels to distillates, efficiently linking B1.0 to 2.0. Most have valuable co-products and multinational partners. Some might call it a tipping point.

Acknowledging Limits

Deserved or not, B1.0 can also be credited with popularizing the food versus fuel debate. I am pleased with this acknowledgment that our fields, forests, and waters have a finite (but growing) capacity to produce biomass. I am disappointed that the issues have been purposely shaped into a false choice.

Regardless of how or where it’s produced, biomass has five primary fates:

Food – eaten in human diets

Feed – grazed, fed, or consumed in animal diets

Fiber -used for textiles, paper, and other products

Fuel – consumed (usually combusted) for its energy content

Functionality – residing in the ecosystem necessary to cycle nutrients and energy

The allocation of biomass among the ’5F’ fates have been on-going for all of human existence, and always been determined by society. Many a study and book have been written about those cultures where choices were unwise, and history suggests success has only come with … Next Page »

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All eyes continued to be on Genzyme this week, but other New England life sciences companies had interesting developments to report as well.

—Good Start Genetics, a three-year-old Boston startup built in part around technology from the Harvard lab of George Church, completed an $18 million Series A round of funding from OrbiMed Advisors, Safeguard Scientifics (NYSE:SFE), and SV Life Sciences. Good Start aims to use gene sequencing technology to help prospective parents assess their risk of conceiving a child with genetic defects.

—Ryan had a chat with Rob Friel, chairman and chief executive of PerkinElmer (NYSE: PKI), about how the Waltham, MA-based maker of lab tools is planning to grow its businesses in the diagnostics, biotech/pharma, and environmental health markets. Some of that growth will be organic, Friel said, and some will come through acquisitions, like PerkinElmer’s recent purchase of Bedford, MA-based VisEn Medical.

—Cambridge, MA-based Genzyme (NASDAQ: GENZ) announced it will cut 1,000 jobs over the next 15 months and sell its Genzyme Genetics unit to Burlington, NC-based Laboratory Corporation of America (NYSE:LH) for $925 million in cash. Both moves are part of an effort on Genzyme’s part to boost shareholder value at a time when it’s facing increasing investor scrutiny and an unsolicited acquisition offer from French drug maker Sanofi-Aventis.

—Third Rock Ventures announced it has raised $426 million for its second fund. The healthcare-focused venture firm, which launched in 2007 in Boston and recently expanded to San Francisco, also announced several personnel changes, including promoting CombinatoRx founder Alexis Borisy from entrepreneur-in-residence to partner.

—Ironwood Pharmaceuticals (NASDAQ:IRWD) of Cambridge reported that linaclotide, its lead product candidate, had passed muster in a clinical trial as a treatment for irritable bowel syndrome with constipation. The trial is the third of four planned before Ironwood and its partners can file for approval of the drug; results from the final study are expected by year’s end.

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Good Start Genetics is making boosters from all corners of the life sciences sector in Massachusetts look really good today. The Boston-based startup, which is developing genetic tests for prospective parents, says today that it has finished raising an $18 million Series A round of funding. There appear to be a number of people and organizations in the Bay State that have helped bring the firm to this point.

Good Start has rallied some of the usual suspects in healthcare investing for its maiden funding round: OrbiMed Advisors, Safeguard Scientifics (NYSE:SFE), and SV Life Sciences. The capital infusion is intended to pay for development and the planned 2011 launch of the firm’s genetic sequencing-based service that hopes to test people prior to pregnancy to assess the likelihood of whether a couple will have a child with a genetic disease. The company believes that sequencing genes, rather than using standard genotyping or SNP-based tests that look for specific genes in a sample, could improve a doctor’s ability to tell a patient whether he or she could have a child with a genetic disease.

Founded in December 2007, Good Start has cleared a several hurdles to finish its first-round financing. The startup was born at Harvard University, based partially on science from the lab of genetics professor George Church, and a business plan hatched by students at Harvard Business School. The company got some early traction when it was named runner up in the HBS Business Plan Contest in 2008. Bob Carpenter, an influential director of the Cambridge, MA-based biotech giant Genzyme (NASDAQ:GENZ), was a judge in the business plan contest and was impressed enough with the Good Start team to take it under his wing. Carpenter is currently on the startup’s board of directors. Harvard’s Church is a scientific advisor to the firm.

More things started to click last year for Good Start, which operates out of the Boston University Photonics Center (though CEO Don Hardison says that the firm will be moving soon to somewhere in the Boston-Cambridge area). The Massachusetts Life Sciences Center, the quasi-public agency that manages the state’s $1 billion plan to spur growth in the state’s life sciences sector, awarded the company a $500,000 loan through its Accelerator Fund. Again, the Good Start team caught the attention of a major player in biotech, Marc Beer, a former member of the board at the Life Sciences Center. Beer, who was previously the CEO of the former Cambridge biotech ViaCell, also got involved with Good Start and has become the startup’s chairman.

With the pedigree of so many prominent advisors, Good Start has attracted some top-tier venture backers. New York-based OrbiMed was the first venture firm to commit funding to Good Start, Hardison says. And later came the Wayne, PA-based investment firm Safeguard and SV Life Sciences, which has offices in Boston, Foster City, CA, and London. OrbiMed and SV Life Sciences have closed the two largest healthcare-focused venture funds, both totaling more than half a billion dollars, this year.

“We feel like we really hit the … Next Page »

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LS9 is on a quest to make renewable fuel at $50 a barrel, and today it is revealing at least part of the scientific road map it’s been following to get there.

The South San Francisco-based biofuel company is reporting today that it has discovered novel genes from strains of cyanobacteria that are the basis for a one-step process that converts sugars into alkanes—the primary component of gasoline, diesel, and jet fuel. The discovery and methods used to find these genes are being disclosed online today in Science magazine.

The paper is an important step for LS9, which has already gotten its share of attention because of its ambitious science, prominent founders, big money backers, and the enormous societal problem it is seeking to solve. The company was founded in 2005 by UC Berkeley’s Jay Keasling, Chris Somerville of the Energy Biosciences Institute, and Harvard University’s George Church. LS9 has raised more than $45 million since its beginning from Flagship Ventures, Khosla Ventures and Lightspeed Ventures. The people and the money have rallied behind the idea of swapping a few enzymes inside bacteria so that instead of converting sugars into fatty acids, they could become super-efficient engines for converting sugars into fuels.

LS9 has talked generally about its concept before, but today’s paper in Science is the first to show in detail how a handful of people at the company actually identified the genes in publicly available databases. Competitors like Cambridge, MA-based Joule Biotechnologies and several academic labs have also been on the hunt for these genes, but LS9 says it was confident enough to lay out its scientific methods in a top journal because the patent applications have already been filed and it believes it owns the process.

“It’s a major achievement,” says Andreas Schirmer, the associate director of metabolic engineering at LS9, and the study’s lead author.

These are still very early days in the renewable fuel business, and LS9 has only performed small-scale runs with this process in 1,000-liter tanks at its South San Francisco-based facility. A much more important test for the business will come later this year, as it seeks to reproduce the same process at industrial-sized scale, as I described in a company profile last month. And this is far from the end of the road. LS9 is actively working now to better characterize and optimize the bacterial enzymes that are produced by the genes to create an ever-more efficient process that can really hum at commercial scale.

Cyanobacteria

But today’s news is about the science, so that’s what I asked Schirmer about the most. For more than two decades, scientists had sought to enable natural organisms to convert biomass into alkanes. There are examples in nature of organisms that can pull off this nifty trick in trace quantities, but nobody had been able to pinpoint the genes that carry the instructions for making enzymes that carry out that task.

The LS9 team benefitted from the era of genomics, in which scientists now have public access to vast databases of genome sequences for all sorts of species, including many different strains of cyanobacteria (also known as blue-green algae). The company’s scientists looked at some of these bacteria that made alkanes, and some that didn’t, and compared their genomes for differences. That helped narrow down the search for the right gene considerably, to make the experiments go quickly, Schirmer says.

In the end, LS9 identified two key enzymes at the heart of the process for creating alkanes. Once those enzymes were identified, it was really just the beginning. The bacteria strains … Next Page »

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Every hot startup has to put up or shut up at some point. This is when it’s time to stop talking about the gee-whiz founding idea and scientific progress. It’s the point when a company needs to prove it can operate a disciplined, sustainable business. The moment is fast approaching for LS9.

LS9, the South San Francisco-based maker of renewable biofuels, has been hot stuff in the cleantech world for a few years. The company counts a trio of star scientific founders in UC Berkeley’s Jay Keasling, Chris Somerville of the Energy Biosciences Institute, and Harvard University’s George Church. It has deep-pocketed venture capitalists on both coasts in Cambridge, MA-based Flagship Ventures and Silicon Valley’s Khosla Ventures and Lightspeed Ventures, who have pumped in $45 million since the company was founded in 2005.

The buzz came from being part of the nascent field of synthetic biology. As Craig Venter has recently demonstrated, scientists are getting better at manipulating the fundamental unit of life, the cell. In the case of LS9, the company has sought to swap in and out a few enzymes inside bacteria so that instead of converting sugars into fatty acids, they could become super-efficient engines for converting sugars into fuels like diesel. Change out an enzyme here or there, and LS9 can also make higher-priced industrial chemicals like the ones that go into soap or toothpaste. The key would be to do this through an industrial fermentation process, and do the work at large scale, at low cost, using existing infrastructure, and in a controlled, reproducible manner.

Stephen del Cardayre

The first couple of years for LS9, according to R&D chief Stephen del Cardayre, were about proving that the company could in fact create a one-step process in which sugar goes into a fermenter and fuels, rather than fats, come out. If the company could do this in a straight one-step process, without creating chemical intermediaries that need to undergo an expensive hydrogenation refinement process, then they’d have an edge over competitors on cost. The next couple of years were about showing the LS9 process could work in a pilot scale, in 1,000-liter batches. The company checked that box. It even showed the fuel in this tiny quantity could pass ASTM certification, which basically says it meets performance standards and won’t wreck engines.

But this year, LS9 will find out if it’s really ready to go from the lab to the factory. The company bought a mothballed fermentation plant in Okeechobee, Florida—a rural part of the Sunshine State—for a paltry $2 million. The plan is to retrofit this old plant so that it can … Next Page »

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The world of DNA sequencing is buzzing about a startup based in Guilford, CT, and San Francisco called Ion Torrent Systems. This stealthy operation, which is advised by Harvard genomics pioneer George Church and supported by a partner in Seattle, finally pulled off the veil last weekend on a tool that uses semiconductors to generate digital readouts of DNA, in an instrument that costs one-tenth as much as competitors’.

Ion Torrent CEO Jonathan Rothberg, who founded 454 Life Sciences before selling that company to Roche for $140 million in 2007, revealed the new unorthodox approach at the Advances in Genome Biology and Technology meeting in Marco Island, FL. Rothberg gave his 30-minute talk in front of more than 500 of the world’s leading scientists who work in sequencing centers.

The company’s idea is to create an instrument that combines the insights of DNA pioneer Jim Watson with that of semiconductor visionary Gordon Moore, Rothberg said. The technology impressed and surprised a number of genomic scientists who blogged about it, including Daniel MacArthur, Keith Robison, and Luke Jostins.

“There was a lot of buzz. [Rothberg] really impressed people. They may be onto something,” says Todd Smith, the founder and chief science officer of Seattle-based Geospiza, a company that makes software for biologists to analyze genomic data, and a partner of Ion Torrent. “Then again, there are always people who are going to say, ‘Great concept, now show me the data,’”

The new technology attacks the standard mode of sequencing from a completely new angle. The existing heavyweights—Roche, Life Technologies, and Illumina—tag the individual units of DNA with light, or fluorescent, signals. And they use sophisticated lasers and cameras to read the flow of those tags. The tags add some cost, and the cameras make for expensive capital equipment that can run around $500,000, plus the chemicals to keep them running.

Ion Torrent, which has been in stealth mode since 2007, avoids the tags, lasers, and optics. Instead, it has built a proprietary ion sensor which spots hydrogen ions that have an electrical charge associated with each individual base of DNA—represented by the letters A, C, G, and T. Those ions are read as they pass through a tiny pore at the bottom of a sample well. Ion Torrent didn’t respond yesterday to a request for a follow-up interview.

The Ion Torrent machine professes to be able to perform a “run” of sequencing for as little as $500, in one hour of work. But that doesn’t mean it can … Next Page »

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If in-depth interviews with some of the heaviest hitters in the New England life sciences industry are your cup of tea, this was the week for you.

—Ryan had a fascinating chat with Jorge Conde, co-founder and CEO of Cambridge, MA-based Knome, about how the startup is evolving in the rapidly evolving field of personal genomics. Just two years ago, Knome, which was co-founded by Harvard geneticist George Church, charged $350,000 to sequence a customer’s genome and interpret the data. Now it’s charging $68,500—reflecting the rapid drop in the cost of sequencing—and trying to find a way to get back in the black.

—Bruce scored an interview with Ralph V. Whitworth, the co-founder of San Diego-based Relational Investors, which has recently amassed a 4 percent stake in Cambridge-based Genzyme (NASDAQ:GENZ). Whitworth, whose firm recently reached a “mutual cooperation agreement” with Genzyme, outlined the six things he thinks Genzyme needs to do to realize its intrinsic value—and offered his assessment of how well the Cambridge firm’s management is meeting each of those goals.

—Luke caught up with Alan Sachs of Merck, which in 2006 paid a whopping $1.1 billion to acquire Sirna Therapeutics, a competitor of Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) in the field of RNA interference. Sachs, who leads Merck’s RNA therapeutics efforts, agreed with Alnylam CEO John Maraganore that RNAi will prove its therapeutic power in the coming decade, but emphasized that figuring out how to deliver RNAi-based drugs is a formidable challenge.

—American Well CEO Roy Schoenberg talked to Ryan about what his Boston-based company has learned in just over a year of operating a system that lets users consult with doctors over the Internet. A couple of interesting trends: the majority of patients who seek care through American Well’s system are women, and just over half of the online doctor visits are for allergies, aches, colds, and other routine ailments, though the system includes physicians from some 23 medical specialties.

—Michael Bonney, the CEO of Cubist Pharmaceuticals (NASDAQ:CBST) spoke frankly to Ryan about his Lexington, MA-based company’s lack of an encore after the success of its first drug, the antibiotic daptomycin (Cubicin). Allowing that the company “could have been a little more aggressive at pipeline building earlier than we started to,” Bonney discussed the company’s efforts to do so now, in part through acquisitions, and to defend daptomycin against generic competition.

—Ryan checked in with Cambridge-based Millennium a few weeks after it forged a major collaboration with Seattle Genetics (NASDAQ:SGEN). The deal, which gives Millennium rights to market the Seattle firm’s drug for Hodgkin’s and other lymphomas in all markets outside the U.S. and Canada, is one of several indications of how Millennium’s clout has grown since it became the cancer R&D arm of Japanese drug giant Takeda Pharmaceutical Company in May 2008, Ryan explains.

—Luke scored a long-sought-after interview with Matt Emmens, who took the reins of Cambridge-based Vertex Pharmaceuticals (NASDAQ:VRTX) last May. Emmens talked about his surprising path to the Vertex helm, and his big goals for the company—chief among them launching its hepatitis C drug, telaprevir, on a blockbuster trajectory.

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Knome, the personal genomics startup co-founded by leading Harvard geneticist George Church, is navigating rapid change in its business. The Cambridge, MA-based launched in 2007 to make whole-genome sequencing and analysis a personal luxury item rather than just a marvel of modern science, but now it’s facing more competition on the sequencing side of its business and a dramatic decline in fees for its bread-and-butter consumer services.

About two years ago the startup announced that it was charging its first three wealthy customers $350,000 to sequence their entire genomes and then have its scientists interpret and analyze the data for each person. A year or so ago the firm dropped the price for that service to around $100,000, due in large part to a sharp decrease in the cost of sequencing. Last June, that price was then dropped again, to $68,500, where it has stayed, says Jorge Conde, the firm’s co-founder and CEO.

If you had your entire genome sequenced just five years ago, you might have been considered a pioneer on par with the first handful of astronauts who ventured into outer space. But there have since been a series of technological advances in tools used to map DNA, innovations that have brought down the price of whole genome sequencing from about $1 million dollars per genome a few years ago to less than $5,000 today.

Conde says the falling costs of genomic sequencing are a positive development for human health and science. He’s even confident that the lower costs of sequencing opens up a much larger market for Knome than possible at its original $350,000 price tag. Still, the company operated profitably in its early days when its small staff of around five full-time employees served clients who paid six figures for their services. Today, the company is trying to find a way to get back in the black with a larger staff of closer to 20 people and a premium service that costs the same as a fancy Mercedes rather than a nice condo near Kendall Square.

“I think the biggest challenge for us has been in clearly communicating the difference between sequencing and interpretation,” Conde says. He adds that while the price of whole-genome sequencing has fallen sharply, the costs of employing teams of scientists to interpret the data have not decreased nearly as much. The firm is spending more money today on salaries, given that its staff is larger than it was two years ago.

Conde says that the greatest value that his firm brings customers is in the analysis and interpretation of genomic data, for which it employs geneticists, bioinformatics experts, and clinicians. (Indeed, co-founder Church, in addition to heading the non-profit Personal Genome Project, stays involved in the business as a chief scientific advisor.) The actual genomic sequencing is handled by the startup’s partners at the Beijing Genomics Institute in China and SeqWright, a genomic analysis lab in Houston, TX. Indeed, plain genomic sequencing has become a commodity business, with firms such as Mountain View, CA-based startup Complete Genomics advertising whole genome sequencing for less than $5,000 per genome.

Fairly or unfairly, Knome is also often compared with the personal genomic analysis services of firms such as Foster City, CA-based Navigenics, and Silicon Valley startup 23andMe, which was started by a team that includes Google co-founder Sergey Brin’s wife, Anne Wojcicki. Both firms offer DNA tests, not sequencing, for $1,000 or less to tell people whether they have genes for certain diseases. 23andMe also gives customers clues about their ethnic roots based on the genes detected in the firm’s genotyping service. (Rather than sequencing a person’s genome to uncover all the genes in their DNA, those firms get a person’s DNA from their saliva and use test chips to find out whether the person has certain genes for diseases related to diseases or heredity. Conde notes that such DNA tests don’t uncover many genes or variants that give people a more complete picture of their genetic makeup, making it difficult to predict whether a person is at risk of developing, say, heart disease.

Even for those who do get their entire genome sequenced, there are limits to what scientists can tell them about the data because there are vast regions of the genome that are not yet fully understood. But that is expected to change as the U.S. government’s investment in genetic research leads to new discoveries about what the reams of genetic data really mean for human health. The National Human Genome Research Institute, a division of the NIH, received a windfall of … Next Page »

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Several of New England’s tech and life sciences firms got juicy deals the past week and a half.

—Boston’s RunMyErrand, an online clearinghouse where busy people can find helpers for odd jobs, raised $1 million in a Series A venture financing round. The cash, from California investors Baseline Ventures and Maples Investments, will help the startup staff up and expand to San Francisco.

—Cambridge, MA-based Cequent Pharmaceuticals raised $3.35 million in the first tranche of its second venture financing round; the round could eventually total $15 million. Cequent, a developer of RNA-interference based drugs, raised $15 million in its 2007 Series A round from Ampersand Ventures, Pappas Ventures, Yasuda, and Novartis Option Fund.

—Pulmatrix raised $30.2 million in a Series B venture round led by Arch Venture Partners and Novartis Bioventures Fund and joined by Polaris Venture Partners and 5AM Ventures. The Lexington, MA-based startup is developing drugs that prevent a variety of microbes, including influenza, from infecting the lungs.

—GTC Biotherapeutics (NASDAQ:GTCB) of Framingham, MA, raised $10 million in a sale of stock to French biotech drug maker LFB Biotechnologies, already a major shareholder

—Waltham, MA-based On-Q-ity, a developer of cancer diagnostic tools, reportedly raised $21 million in a Series A round of venture capital from Mohr Davidow Ventures, Bessemer Venture Partners, Physic Ventures, and Northgate Capital. The startup was formed through the merger of two Mohr Davidow portfolio companies, CELLective Diagnostics and The DNA Repair Company.

—Boston’s Flybridge Capital Partners helped funnel $3.4 million into New York-based open-source database developer 10gen. Returning investor Union Square Ventures also contributed to the Series B round.

—Special effects software startup GenArts of Cambridge, MA, acquired St. Louis, MO-based Wondertouch, whose software generates so-called “particle-based” special effects. Financial terms of the deal were not disclosed. Wade took a fun look at the companies’ technologies.

—We got the inside scoop last week at our Xconomy event on pharmaceutical innovation when Boston-based Enlight Biosciences revealed that it struck a deal with Abbott Laboratories (NYSE:ABT). Abbott agreed to join the consortium of big pharmas that are … Next Page »

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Ion Torrent Systems, a company advised by Harvard University genomics pioneer George Church, has raised $23 million in new capital to develop what it calls on its website “groundbreaking and highly disruptive technology” and to hire people who “want to do what it takes to put a dent in the universe.”

The company, which has a location near Yale University in Guilford, CT, and one in San Francisco, has raised $23 million in equity out of a financing round that could be worth as much as $26 million, according to a regulatory filing released today.

The document doesn’t say who invested, and Ion Torrent didn’t immediately respond to a request for comment. But the new company is associated with some big names, including Church and Stanford University’s Ron Davis, who serve on the company’s scientific advisory board, and CEO Jonathan Rothberg, who was the founding CEO of 454 Life Sciences before that company was sold to Roche two years ago for $140 million in cash.

Ion Torrent Systems website is pretty vague about what it is really up to, although its job postings offer some clues. It says it is looking to hire molecular biologists and biochemists to do the aforementioned universe denting, and that it offers that it offers the opportunity to work with top scientists “and have a profound impact.” It is also looking to hire software developers and “evangelists” who want to “create the biotech software platform of the future and share it with the world. Build powerful tools and create a tight-knit community that will use and develop them for years to come.”

GenomeWeb speculated back in March, based on a patent application filed by Ion Torrent Systems, that it is working on new DNA sequencing technologies, although the company wouldn’t confirm that. Major players in the field—such as Carlsbad, CA-based Life Technologies, San Diego-based Illumina, and Roche—have been in a competitive frenzy to lower the cost of sequencing full human genomes. One Mountain View, CA-based startup, Complete Genomics, raised $45 million in venture capital earlier this year to support its new model for sequencing entire genomes for as little as $5,000 apiece or less.

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